BY SPRINGNEWSNG MEDIA LIMITED
MARCH 4, 2025

Nigerian cement manufacturers defied economic challenges in 2024, posting profit growth through price hikes, with analysts seeing investors’ interest in their stocks.

BusinessDay analysis of Dangote Cement Plc, BUA Cement Plc, and Lafarge Africa Plc’s unaudited financial statements reveal that their after-tax profit collectively rose to N677.48 billion in 2024, a 17.6 percent increase from N576 billion in 2023. This surge was due to price adjustments implemented in response to rising operational costs and inflationary pressures.

Dangote Cement posted the highest profit at N503.4 billion, followed by Lafarge (N100.1 billion) and BUA (N73 billion), driven by strong revenue growth. According to financial reports, the combined revenue from cement sales saw a 68 percent rise to N5.15 trillion from N3.06 trillion.

Arvind Pathak, the CEO of Dangote Cement, stated in the company’s earnings report, “Despite facing macroeconomic challenges both globally and domestically, we remained dedicated to innovation and value creation, which resulted in strong returns for our stakeholders. Our group revenue increased by 62.2 percent. This growth was driven by a combination of increased sales volume and price adjustments to keep pace with inflationary trends.”

Analysts at CardinalStone Research said in a note that the Nigerian cement sector will report a revenue boost in the second half (H2) of 2024, driven by a surge in public sector demand and government-backed infrastructure projects. They noted that an elevated pricing environment would boost revenue but cautioned that cost pressures, higher energy prices, haulage costs, FX losses, and a higher effective tax rate in 2024 could pressure margins.

“The outlook for the cement industry is largely positive on the back of the Federal Government’s capital expenditure drive, which includes a N10 trillion allocation in the 2024 budget and an additional N6.2 trillion supplementary budget,” the analysts said.

Dangote Cement Plc

Dangote Cement reported a revenue increase, reaching N3.58 trillion in 2024, a 62.7 percent rise from N2.2 trillion in 2023. This surge was largely attributed to strategic price adjustments and sustained demand. However, the company’s profit after tax stood at N503 billion, influenced by production costs totaling ₦1.64 trillion.

In terms of market valuation, Dangote Cement’s stock price appreciated by 50 percent in 2024, closing at N478.80 per share as of December 27, up from N319.80 as of January 1. This increased the company’s market capitalisation to N8.07 trillion, reflecting a gain of approximately N2.689 trillion.

“In line with its dividend policy, the Directors have recommended a dividend of N30.00 for the 2024 financial year (same as in 2023). The Board considers this dividend appropriate and aligned with the company’s strategic growth objectives, reinforcing investor confidence and shareholder value,” the company disclosed in its statement.

BUA Cement

BUA Cement also showcased strong performance, with revenues climbing to N876 billion, marking a 90.8 percent increase from N459 billion in 2023. Its after-tax profit rose to N73.9 billion, marking a 6.4 percent increase from N69.4 billion in 2023.

The company disclosed in its financial statement that “The Board of Directors recommends for the approval of shareholders a payment of N2.05 dividend per 1 ordinary share of 50 kobo each, out of the profits declared in the financial year ended 31 December 2024 (2023: N2.00).”

The company’s stock price fell by 8.8 percent in 2024, closing at N93.00 per share, down from N102.

Lafarge Africa

Lafarge Africa reported a revenue increase of 71.8 percent, reaching N696.7 billion in 2024, up from N405.5 billion in 2023. The company’s profit after tax nearly doubled, achieving ₦100.1 billion for the fiscal year ending December 31, 2024, compared to ₦51.1 billion in 2023.

In 2024, Lafarge Africa’s stock experienced a 120.1 percent increase, closing at N69.34 per share, up from N31.50. This growth resulted in a market capitalisation of N1.17 trillion as of December 27. The company disclosed that it has proposed a final dividend of 120 kobo for the financial year ended December 31, 2024.

Industry Analysis

The Central Bank’s Purchasing Manager Index revealed that cement makers’ PMI in January rose to 60 percentage points, the highest since October 2024. A reading above 50.0 indicates expansion, while a reading below signals contraction.

BusinessDay earlier reported that the price of cement jumped again from N7,500 per 50kg back to N8,500 depending on the brand and location. This marks the fourth price increase from January to November, with prices nearly doubling from N4,500 at the beginning of 2023.

“The immediate impact of these price increases is that project timelines are disrupted, causing safety concerns as contractors with depraved minds are under pressure to cut corners,” said Sebastine Ovie, an estate manager.

Ovie mentioned monopoly, a high exchange rate, and energy costs as major causes of frequent price hikes. He explained that there are only three major producers of cement in Nigeria—Dangote, BUA, and Lafarge—who control about 95 percent of cement production.